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Heard of the famous Ant that toiled hard day and night to save food for the winter and the Grasshopper who only mocked at the ant then and died for want of food later?
Though such extremities are mostly found in fables, the valuable message behind it cannot be ignored.
Saving for a rainy day becomes important simply because the future is uncertain. And while the ant did not have to worry about inflation sadly you need to. Personal financial planning means chalking out your future financial aspirations and Goals and charting out your course of action to meet them.
It is about knowing the amount of expenditure you incur during a given period, let's say a month versus the income you earn leaving you with a positive or a negative balance through Budgeting. It is also about Investments. Investing the money that you have saved over a period of time, rightly, in avenues that can multiply your money fetching you good returns in the bargain. Heard about the magic of Compounding?
You dream of a secure future for yourself and your family. Good education for your children, a comfortable lifestyle and enough funds to fall back on just in case the unexpected happens.
And you would like to ensure that these good times continue forever. But what if YOU, fall critically ill, or meet with an accident leaving you crippled for life.
What if the unforeseen, the unexpected happens. Will your family be able to enjoy the same lifestyle as before? What about your children's future - their education. Will they have to suffer?
Would you not like to ensure that your family receives all the comforts even when God forbid, you are not around. But how? Insurance is the answer to such worries.
Over a period of time you would be on the verge of retirement; a stage of life when you would want to relax after having fulfilled all your responsibilities towards your family and spend your old age in comfort.
But you still need funds for fulfilling your day-to-day needs, for taking care of the illnesses that may strike etc. Hence you must consider Retirement Planning early in life in order that you are in a position to create a nest egg for yourself.